An October 25th Update: Ontario Legislature Making Further Strides to Combat Housing Unaffordability
An Increase in the Non-Resident Speculation Tax
On October 25, 2022, the Province of Ontario made a surprising announcement, following a recent pattern of moves to combat housing unaffordability. The province increased the Non-Resident Speculation Tax (often known as the Foreign Buyer’s Tax) to 25% – effective immediately.
The non-resident speculation tax (NRST), is a tax on the purchase of residential property in Ontario, by non-residents of Canada. This applies to anyone who is not a Canadian citizen or permanent resident of Canada. It also means that if any non-resident is on title to the property (even alongside a resident) the tax surcharge applies (unless they fit into an exception such as they are a spouse, protected person or Ontario Immigrant Nominee).
This move comes after a recent March 2022 hike, discussed here, where the province raised the NRST from 15% to 20%. In March the NRST was also expanded to apply province wide, whereas it previously only applied Greater Golden Horseshow Region.
This announcement comes only shortly after the Federal announcement of the Prohibition on the Purchase of Residential Property by Non-Canadians Act. It is clear that the Federal and Provincial governments are working in unison to improve housing affordability, in Ontario, and beyond.
Experts find themselves questioning whether this move will have any impact on an already cooling market, or if it is a misguided attempt to combat a growing housing crisis. It will take time for any impacts of this change to become clear.